Airlines should be braced for tougher conditions: IATA

IATA chief economist Brian Pearce believes the industry should be braced for more difficult conditions over the next 12 months, amid continued market challenges and the heaviest falls in air freight demand since the financial crisis a decade ago. Thursday, Pearce flagged that conditions faced by airlines had grown more difficult as costs – notably around fuel and labour – have risen. "I think what the issue has been is in the last 12 months suddenly the industry has lost its ability to recover those costs and unit revenues have started falling, rather than rising to recover the cost issues that we've got," notes Pearce. He suggests there are indicators that, after an unprecedentedly long positive economic cycle, a recession could be around the corner. <br/>